The Jig Is Up for Texas Executives

HOUSTON (CN) - Two Texas executives embezzled $1.3 million from their energy company to pay for vacations, hunting trips, fishing gear and country club memberships, federal prosecutors say.

Federal agents arrested John Upchurch, 59, of Spring, on Monday, and Kathleen Smith, a 46-year-old Austin resident, turned herself in Tuesday morning, the U.S. Attorney's Office said.

Both were arraigned Tuesday before a federal magistrate judge in Houston and charged with conspiracy to commit mail and wire fraud, five counts of mail fraud and 12 counts of wire fraud.

Chase Power Development LLC, formed by Quintana Capital Group to manage a Corpus Christi oil drilling project, hired Upchurch and Smith in July 2008.

Prosecutors say Upchurch and Smith "submitted false invoices for fake projects in order to receive company funds for their own personal expenses to include personal travel, hotels, country club memberships, personal car restoration, fishing equipment and a hunting trip," while employed as the company's CEO and president.

They also charged personal expenses to company credit cards and embezzled $1.3 million from June 2008 to June 2012, prosecutors said.

If convicted, they could spend the rest of their lives in prison. They face 20 years on the conspiracy to commit mail and wire fraud charge, and 20 years on each of the 17 mail and wire fraud counts.

Upchurch paid a $20,000 bond Tuesday and was released.

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